# Finance final

Essay by jay2davCollege, Undergraduate October 2014

BA 213 Principles of Accounting III Instructor: Usha Ramanujam

Dear Students,

Here are the Test#2 review questions. Answers are highlighted. If you wish to work the questions first, I suggest highlighting the entire review so you don't know which is the answer!! See you in class!

Usha

Test 2 - Review questions.

1. Discretionary fixed costs:

A) cannot be changed since they are fixed.

B) have a long-term planning horizon, generally encompassing many years.

C) are made up of facilities, equipment, and basic organization.

D) responses b and c are both correct.

E) none of these.

2. Which of the following would usually be considered a committed fixed cost for a retail sales corporation?

A) lease payments made on its store buildings

B) the cost of the Caribbean trip given to the employee of the year

C) the cost of running an annual leadership seminar for managers

D) both a and c above

3. The high-low method is used with which of the following types of costs?

A) Variable.

B) Mixed.

C) Fixed.

D) Step-variable.

4. Iaci Corporation is a wholesaler that sells a single product. Management has provided the following cost data for two levels of monthly sales volume. The company sells the product for \$133.60 per unit.

 Sales volume (units) 4,000 5,000 Cost of sales \$383,600 \$479,500 Selling, general, and administrative costs \$124,400 \$136,000

The best estimate of the total contribution margin when 4,300 units are sold is:

A) \$112,230

B) \$162,110

C) \$28,380

D) \$45,150

5. Davis Corporation has provided the following production and total cost data for two levels of monthly production volume. The company produces a single product.

 Production volume 1,000 units 2,000 units Direct materials \$44,200 \$88,400 Direct labor \$37,300 \$74,600 Manufacturing overhead \$48,500 \$62,200

The best estimate of the total monthly...